City considers combining cash reserves and insurance
AIRWAY HEIGHTS — At the June 10 City Council meeting, City Manager Albert Tripp provided an overview of the city’s reserve funds policy and its evolution since 2009.
Tripp explained the existing policy, which maintains a cash balance for emergencies, capital expenses, payroll and unanticipated events.
“Back in 2009, our budget was $4 million, and now it’s $14 million. We utilize 8% as a planning basis,” Tripp said, noting that the city is currently looking at a reserve range of $1.1 million to $2.1 million, with two months of operating expenses estimated at $2.4 million.
The city’s present reserve funds are at $1.5 million, including payments received from the Kalispel Tribe, which ceased in 2022, leading to a reduction in revenue. Tripp emphasized the need to adjust the reserve policy to reduce volatility and account for risks such as changes in revenue sources and natural disasters.
“The full goal of reserves is to reduce volatility,” Tripp stated, highlighting the importance of reserves in providing a financial buffer. He discussed the shift in thinking about reserves, comparing them to savings and insurance.
“Today’s best practice thinking is a marriage between insurance and liquidity in terms of cash, allowing us to recover in various circumstances,” he said.
Councilman Larry Bowman inquired about the current reserve funds.
Tripp responded, “Oftentimes, it is hinged upon the scarcity of resources; an infusion of dollars allows these pieces of equipment to be purchased.”
Clare is an Eastern Washington University graduate and a reporter at Free Press Publishing.
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